The price of a stock is equal to the present value of expected future dividend payments.

Name: The price of a stock is equal to the present value of expected future dividend payments.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

According to the dividend discount model of stock valuation, the price of a stock is determined by discounting the expected future dividend payments at a rate that reflects the time value of money and the risk associated with the investment. Therefore, the statement is true.

The Price of a Stock Is Equal to the Present